The gap between urban and rural areas has widened in China since the early 1980’s. Because economic opportunities are found in the cities, millions of peasants have moved to urban centres. The Central government is eager to find solutions to reduce migration flows and rebalance development between rural and urban regions. A possible remedy may be to industrialise these rural regions, so that the inhabitants are willing to stay in their home areas.
In a paper published in 2012, Song Huasheng, Zhu Xiwei (Zhejiang University) and Jacques-François Thisse (Université catholique de Louvain)1 studied the relations between rural industrialisation and urbanisation. According to their research, the two phenomena can take place simultaneously in China. If rural industrialisation is still rather weak in the Western provinces, this is mainly due to the lack of technology in the local firms. Moreover, these firms have undergone stronger competition from urban companies as a result of the improved transportation infrastructures between urban and rural areas.
According to the authors, rural industrialisation is conditioned by two factors: greater access, for rural companies, to technologies and better training for rural workers. The “Go West” development strategy that has been implemented since 2000 includes several measures supporting education in the least developed parts of China. However, these measures need to be further developed in order to reduce regional inequalities.
There is another measure that would help to industrialise rural areas, namely a reform of rural land ownership and rural land transactions. No real industrialisation can take place if peasants cannot cut their ties to their farm land. The marketisation of rural land would create larger and more efficient agricultural firms, and this would also allow former peasants to create their own local enterprises. The money collected from land transactions could also be invested in their training.
All this means that rural industrialization cannot be successfully implemented unless distinctions (and inequalities) between rural and urban land statutes disappear.
- Song, Huasheng, Thisse, Jacques-François, Zhu, Xiwei. (2012)Urbanization and/or rural industrialization in China. Regional Science and Urban Economics, Volume 42, Issues 1–2, January 2012, pp.126–134.